Trade Embargo Will Hit Florida Hardest

A trade embargo between the United States and Nicaragua will have a greater impact on Florida than any other state, yet the losses will be confined to a small group of companies.

The embargo, which started last week, will primarily affect firms involved in importing and exporting goods. Many of the products involved in the embargo passed through Florida ports but were not produced or consumed in Florida.

The Reagan administration halted trade between the two countries in an attempt to intimidate the Nicaraguan government, which has ties to Cuba and the Soviet Union.

President Reagan invoked emergency powers May 1 in imposing the embargo and other sanctions, calling the Nicaraguan government an ``extraordinary threat to the national security of the United States.`` Reagan announced the embargo shortly after Congress refused to authorize aid to guerrillas who are attempting to overthrow the Nicaraguan government.

The move ends all direct trade between the United States and Nicaragua, suspends direct air service between the two countries, and also suspends calls at American ports by Nicaraguan flag vessels.

Just how large a price South Florida will pay as a result of the embargo remains to be seen. Kevin Lipner, a professor of economics at Florida International University who specializes in international trade, said the embargo will result in lost jobs and lower profits for some Florida companies.

``Certainly there`s a cost. There will be jobs lost,`` he said.

While the embargo will have a negative effect on the local economy, the losses are not expected to be large. Trade between the two countries, which was never great, has diminished since the current Nicaraguan government came to power in 1979, Lipner said.

``The magnitude is small,`` he said.

Total trade between Florida and Nicaragua last year amounted to about $74.8 million, according to the Florida Bureau of International Trade and Development. Some $51.2 million of goods were shipped to Nicaragua, and $23.6 million of goods were imported.

Florida accounted for about 47 percent of all trade between the two countries.

The problem with the embargo is that the lost trade can not readily be replaced, Lipner said.

``It is not made up from anywhere. Somebody else gains. Somebody else picks up that activity. Whatever we don`t sell them, the Japanese or the Russians or somebody else will,`` he said.

More disturbing than the lost jobs and lowered profits is the apparent shift in government policy, which could lead to other embargoes and greater losses in trade, Lipner said.

``The idea of piddling around with trade as a weapon is ominous,`` he said.

The Reagan administration previously had been a champion of free international trade. The only other country subject to similar measures is Cuba, and that embargo had been in place for decades, Lipner said.

Ivan Cosimi, director of the Miami office of the United States Foreign and Commercial Service, said the nature of the products shipped between the two countries will help to minimize the embargo`s impact on Florida.

``A good part of it has been produced in other parts of the United States,`` he said.

The biggest export items to Nicaragua were pesticides, fungicides, agricultural equipment, paper products and animal fats and oils. As for products imported from the country, the heaviest volume was in bananas, frozen meats, frozen shellfish, coffee and tobacco, Cosimi said.

While Florida manufacturers will not bear the brunt of the embargo, some sectors, such as insurance, banking and, of course, the ports and shipping companies, will lose business, Cosimi said.

Philip Bates, vice president at Concord Shipping in Miami, said his firm will lose about five percent of its business as a result of the embargo.

While the company had not delivered goods directly to Nicaragua, its ships make stops in other Latin American countries. Much of the trade with Nicaragua was done through Honduras, Bates said.

Bates said the company viewed the embargo as more of an economic headache than a political issue.

``We`re certainly non-political. We`re just a steamship line. The embargo is on, and that`s reality,`` he said.

Ken Coleman, vice president of Seaboard Marine, said his company also is suffering as a result of the embargo.

``It does have a great impact,`` he said.

The company, which employs about 200 people in Miami, did about 20 percent of its shipping business with Nicaragua.

``It`s not very happy news for us,`` Coleman said.

Companies will not be able to get around the embargo by shipping Nicaraguan goods through other Latin American countries, as the law forbids it. Violators can be fined as much as $50,000 and imprisoned for up to 10 year.

While some members of the business community are dismayed by the embargo, others applaud it.

John Bauer, president of Fort Lauderdale-based Basic Foods International Inc., said his import and export firm stopped doing business with Nicaragua about 18 months ago.

``We discontinued our purchases from Nicaragua because we weren`t in sympathy with the government,`` he said.

While the embargo will hurt some American businesses, it is worth the sacrifices involved, Bauer said.

``As far as I`m concerned, it`s the best thing that ever happened. It`s long overdue. It`s going to hurt them more than it hurts us.``